Sustainability in the Aerospace & Defense Industry

The world faces the challenging task of slowing the rate of climate change and ultimately reversing it.  The Aerospace and Defense (A&D) industry must play its full part in contributing to this massive and complex problem. Fortunately, executives in the sector are not only aware of what is being demanded of them but are also changing their strategies to meet the goal of net-zero carbon emissions by 2050.

KPMG International explores the scale of the challenges facing A&D companies and the steps they need to take if they are to meet their environmental, social and governance (ESG) commitments over the next 25 years. The route to success will be difficult, but as our report makes clear, the industry is determined to do the right thing.  For readers who are searching for ways to navigate the journey to a carbon-free future, this report discusses highlights including:

• A&D companies face a situation in which the demand for air travel is expected to grow rapidly while the industry will have to reduce carbon emissions between now and 2050.
• The challenge includes how the sector needs new technologies to meet the sustainability targets. A&D companies must transform their operations to maximize the benefits of the technologies, while the cost of technological change must be made more manageable.
• A&D manufacturers may not be able to reach their goals unless they integrate carbon reduction strategies throughout their ecosystems, including collaborating with their competitors. This is particularly important within their hugely complex supply chains.
• Governments will play a key role in guiding the A&D industry down the path toward net-zero.

KPMG International considers three key points which executives should seek to bear in mind as they plan ahead: building a climate-aware corporate culture; aligning decarbonization goals with enterprise strategy and developing a plan for the next 25 years.